AbstractThe fundamental purpose of this research is to obtain empirical evidence about the influence of information asymmetry, Employee Stock Ownership Program(ESOP), and auditquality on the practice of earnings management using discretionary revenue components of manufacturing firms in Indonesia and examine the moderating effect of financial distress on these factors. Firms used as referencesaremanufacturing companies in thebasic materials, industrials, consumer non-cyclical, consumer cyclical, and healthcare pharmaceuticals sectors listed in the Indonesia Stock Exchange from 2019-2021. This study uses purposive sampling method with panel data moderation and obtains total of546 sample data units. Based on the research conclusion, information asymmetry can trigger a higher risk of earnings management, while the existence of an ESOPand audit quality can be used to suppress earnings management. Financial distress itself has nodirect effect on earnings management. Financial distress has not been proven to strengthen the positive influence of information asymmetry orweaken the negative influence of the ESOP.Meanwhile, the financial distress conditions can weaken the role of audit quality in an effort to minimize earnings management practices of the company
Oleh :
Susi Dwimulyani
